By Chidi Obineche
CHIEF Phillip Asiodu is one of Nigeria’s leading technocrats and elder statesmen. He was a permanent secretary, (dubbed super permanent secretary at the time) during the political upheavals of the 60s and 70s and he’s best described as an encyclopedia of the events of that period. He later became the secretary (minister) of petroleum and mineral resources during the 1993 Ernest Shonekan transition (ING) regime. In 1999, he was the chief economic adviser to President Olusegun Obasanjo. Now, in the private sector, he told Sunday Sun with insight about the dreams of the nation’s founding fathers, how it was aborted, the roles people played in the stilted growth of the nation, including the unflagging story of oil subsidy. The interview took place in his office in Lagos.
What’s the significance of the Asiodu lecture series and why at this time?
Frankly, people have been urging me to do it, thinking that one has the career record, and has been a local academic and a businessman. I have been a public servant, in government and maybe with that background and reputation, I can attract very high level academic, political personalities, economic decision makers, locally and internationally to lead discussions on major economic challenges facing our country. And so, two things happened simultaneously; The Philip Asiodu Economics Initiatives, and the lecture series. Two different groups have been pushing and have agreed that henceforth, there will not be two organizations again. The lecture series is part of the activities of the Economics Initiatives, because it serves the same purpose which is really to create a platform where highly respected, knowledgeable academics, businessmen, decision makers in government and leaders in various international organizations concerned with the management or co-ordination of things in the world economy can come and lead discussions in a non- partisan, very objective and authoritative way, so that we create better data and firm actions for the management of the Nigerian economy by whoever is in charge at a particular time.
Why is it coming now? Is it because of the slide in the nation’s economy?
It was not just to create time, and firm actions for decision makers and managers of the economy, but also by disseminating this knowledge publicly, we create a wider audience which understands why certain decisions have to be taken, so that needless controversies are avoided. Certainly, Nigeria is passing through a very challenging period. But we have also over the last 40 years failed to exploit the opportunities we had. So, we have these challenges. It’s acute now; it’s a bit topical because of the drastic collapse of oil prices,(over 70%) since June or July, 2014. So, it’s topical. It’s also crucial in the sense that we have a change of government. Government is coming out with new decisions, a new team, and anything we can contribute in a non-partisan, objective, authoritative way to influence the understanding of what the challenges are, what the options are and at the same time educate the public to be ready to accept in good faith and support the decisions taken by the leaders is welcome. So, it’s critical. On December 7 last year, The Phillip Asiodu Economics Initiative had a roundtable on oil subsidy and budget restructuring. Very technical . We didn’t make it public because we didn’t plan to attract uninformed, negative and sometimes counter-productive commentaries. We sent a small delegation and met the president quietly and briefed him. Later on, with agreement we will come to the public and say exactly what we were saying. The government has its own machinery for gathering data, policy actions and deciding what to do. But at the same time, there is a lot of expertise outside- retired people (yesterday’s men) like myself who have some experience. And as I always say to people, if something is obvious to you, it might have been obvious to others. Our dream is for Nigeria to succeed. It has been my dream since I joined the public service in 1957. It has been my dream that Nigeria should actualize the dreams of people like Dr Nnamdi Azikiwe when he published Renascent Africa in 1937, saying that the African must someday command international respect. The black man must restore to himself the respect he lost in the Trans Atlantic slave trade. And to do that, Nigeria is in a pole position to be in the vanguard of this African regeneration or renaissance. And so, those of us who were available to take over from British civil servants at independence, planned to initiate programmes following the examples of the colonialists to sustain planning. We did not, to our great tragedy. But by the end of that century, that was by 1999, Nigeria could have become a developed country; a first world country, and in the vanguard of African modernization. That didn’t happen.
Why didn’t it happen?
It didn’t happen because unfortunately we had a military coup in 1975 which unfortunately, after taking power decided to abandon the 1975-1980 plan.Not only that, it decided to abandon the principles of planning and the discipline which it entailed. Now, I tell you, even under Great Britain during the colonial times, we had a 10-year development plan which ended around 1958 when we were talking about independence. Independence came, and luckily our Prime Minister, Tafawa Balewa was friendly with the Prime Minister of India, Nehru who believed in planning. We still had the two systems competing – capitalism led by America, Communism/ Socialism led by Russia, and in between, there were people who believed in a dominant role for government, but not a total role. They believed that government should be there, public sector should be there, and private sector too. But they insisted that government must ensure that even the poorest man had adequate welfare. So, we had this communism on the extreme left, extreme capitalism on the right and in between them were the Welfarists where, in fact, Nigeria once belonged. And you see that in the 1975 – 80 plan, it was stated that the state will be the determinant in directing the economy, and that the state will own the majority in every strategic industry. That, of course was amended. The collapse of the Soviet Union and the systems impacted on human psychology, and the principles of incisive efforts. You can have that, but make sure that government has a safety net for the poorest, and also ensure, (and this is most important) that however poor a person is, he has access to qualitative education, because that is the greatest instrument for upward mobility and for efficiency and productivity in running the nation.
You worked under General Gowon’s government…
(Cuts in) I am still answering your first question. We will come to that.What happened in 1975 was that not only did they abandon the 1975-80 development plan, but all the previous ones. After Independence we had a new plan; first it was the 1st post- Independence plan(1962 –1966), but because of the crisis, they extended it to 1968. Under that plan, there were no oil resources. It was based on savings from exports of agricultural products like cocoa, groundnuts, palm oil and palm kernel. The economy was growing at 6% per annum. Then the crisis came, and the civil war. Even during the civil war, we were still planning, talking and putting things together. We had an international conference in 1969. Few people from the liberated parts of Biafra and the rest of the country, people from abroad, from the World Bank, students, labour leaders, civil servants attended. That was what led to the 1970–75 plan.The three Rs – Reconciliation, Rehabilitation and Reconstruction. And under that plan of 1970 -75, the economy was growing at 11.5% per annum. And by the middle of the ‘70s we were already in the middle income category. Ten more years, at the growth of 11.5 %, it doubled. We, like the Asian Tigers, could have escaped from poverty. Then, we had this 1975 change of government. Nobody quarrels about that change, but my greatest happiness is that the two principal leaders, Murtala and Obasanjo were known by us as those who approved the 1975-80 plan. That plan was launched in April 1975. The code was July 1975. The plan was abandoned, the principles behind it negated. Without plans and priorities, they ruled the country. In every economy, money comes, money goes.Wittingly or unwittingly, we got into this situation in which the public service which had been inherited from the British, began to lose steam. It was also inherited by the Indians, Canadians and Australians. Over 10,000 civil servants from top to bottom were laid off in two months without due process, respect for tenure, and proper investigations. As was shown later by Monsignor Pedro Martins who was sent to evaluate the process, more than 90% of them should not have been sacked. That was a cathartic moment. In 1954 before independence, our founding fathers demanded to know the kind of civil service we should have. The British, who have had a long history of civil service, starting with them being cousins of kings were in the best position to lead and guide the evolving new nation. They went to India, and when challenged with running into problems, they invented a merit based, independent, non- partisan civil service. It worked there, and till this day it is still working.That was around 1857. After that, the civil service was run independently by independent public service commissions. Civil servants didn’t change with change of governments. And when in 1954, Dr Nnamdi Azikiwe, Sir Ahmadu Bello, Chief Obafemi Awolowo, Prof Eyo Ita and Mallam Aminu Kano, representing the major parties were negotiating for independence, all the documents and the leaders insisted that an independent Nigeria will run an independent public service . And they kept it by establishing the Public Service Commission in 1954. Soon after, the regions had regional governments, and had civil service which was unitary. It was broken up into North, East, and West. They also had their own civil service commissions. The civil service commissions were responsible for recruitment, promotions, and discipline. That was how things were. Once the military coup occurred in 1966, Ironsi still kept the civil service independent, only that they tried to make permanent secretaries to assume the title of ministers.I was a permanent secretary then. It was just a transition, and we kept advising him that whether he had suspended the constitution or not, he should try and have well meaning political leaders in his government.Then there was the counter coup of July 1966 which brought Gowon to power. Gowon kept the civil service intact and the civil servants helped in organizing all the logistics that kept him in power. In fact, for two days there was no government and nobody knew. We were useful and kept things moving. We kept insisting that he should bring in well-meaning political leaders and eventually he did it in May 1967, immediately after the declaration of the Biafra secession. Then in 1975, what happened? You were in the office working and in the 1pm news bulletin, somebody had whispered your name anonymously to somebody and without investigations, without queries and answers, without due process your wife hears in the 1 pm news bulletin that you had been retired with immediate effect. Sometimes they said with pension, and other times they said without pension. Your wife drives to the office and says ‘my dear what are you still doing here’? And you retorted ‘please I’m busy’. She says, they announced on radio that the job is finished. A decree was passed that you cannot go to court for redress. The remaining civil servants in service unfortunately got into this syndrome of making hay while the sun shines. Is that not corruption? That has haunted us till this day. The more damaging thing I want to talk about is planning, and identifying priorities. The world works with people, and it works better when they know each other. You are sacking people that over the years have developed international contacts; who were the image of Nigeria; who could explain what Nigeria was doing.You introduced a system which was one of impunity. Before 1975, every year, ministries produced annual reports. This is what we are supposed to do; this was our budget; this is what we have achieved. Since 1975, no such report has been produced again. See the consequences?Again, if some of us had remained , because some of those who came to rule knew what we were when they were Captains and Lieutenants, we would be able to tell them, look you can’t do this. From an annual growth rate of 11.5%, the two decades that followed, we never grew by more than 2%. In fact, in 1981, growth was minus 1%. You compare it to the horrible situation today, where at independence, only 20% or 25% of Nigerians were living under poverty line as defined internationally. Today it’s 75%, even though we have produced one or two people in the Forbes list of billionaires. The bulk of us are in great misery. And that is why food security is important, and the future is very challenging.
How can the situation be salvaged now in your view?
The government should embrace basic planning; have a vision that will go beyond….
Would you ascribe this to why we have a controversial 2016 budget?
How was it prepared? Who prepared it? How many consultations were made? How much training did the civil servants go through? One of the challenges today is how to bring back the type of British civil service we had. We should go back to competent, non- corrupt, protective civil service which will objectively and transparently manage and interface with private sector implementing companies.We had departments which were doing things directly – departments of public works. They built power stations, government houses. We must go back to that era when government’s procurement was cost effective and corruption was at zero level, because you knew that if you were caught you would be punished. We had this massive interference, or purge in 1975 if you like, and after that, General Babangida’s regime even went further and published a decree in 1988 where ministers could now hire and fire civil servants. Secondly, the permanent secretary was no longer the accounting officer, and was no longer a permanent official in the sense that with a change of government, the director general changes.The title was changed to director general. Although the decree was abrogated in 1995,the damage and psychology which it had engendered is still with us.
You met Buhari recently. What did you tell him about the free fall of the naira against other major foreign currencies?
Yes, but we didn’t’discuss the free fall of the naira. Whatever that means. We discussed issues of the business roundtable, oil subsidy and the budget. On the removal of oil subsidy, it’s true that because of the low price of crude oil, even the approved so called subsidy price is higher. This should not be forever. In fact, I can envisage that before the end of the year, oil prices will return to maybe $40. But even if it doesn’t, within two years it will return, because I expect equilibrium of oil prices at a point where Americans can produce for self sufficiency, even if not producing for export. In that situation, oil that is below $ 55 per barrel now will be reviewed. Some people are even projecting that by 2017 we will come to that. It is for us to educate ourselves. We must pay appropriate price for the goods we want to consume, if we want to consume them on a sustainable basis.The people who have enjoyed the so-called oil subsidy are not the poor men. I don’t know where NLC, ( Nigeria Labour Congress) gets its data. It’s diesel that we normally use in these long articulated trucks to carry goods to market places. It is diesel that factories use when the public power supply companies cannot supply power. Diesel has never been under subsidy. PMS (Premium Motor Spirit) for cars as a factor in the cost of production is not a major thing. Even if it were, a situation where you have artificial prices, so that our ex- refinery prices cannot produce enough money to repair those refineries and maintain them is bad. And our ex- refinery prices are so much lower than ex- refinery prices from Accra refinery, or Abidjan refinery, among others. All that we are doing is that we succeeded in fuelling massive corruption. Ships come here, collect subsidy and divert to other countries. I believe that 100,000 plus barrels of products a day supposedly imported for Nigeria is smuggled to many African countries from Angola to Dakar. Is that sensible? The tragedy of it is that this would have ended by 1995. As secretary for petroleum and mineral resources, I campaigned for appropriate pricing in 1993; I negotiated with the trade unions and we agreed on the programme to remove subsidies. We agreed that on April 1 1993, we remove subsidies on non- pump products; aviation fuel, and that by June 1, we will start removing comprehensive subsidies without exception.Secondly, the plan was that within two years there will be no subsidies. The compromise we reached then is not even necessary now, because as I said, the subsidy price is even higher than the landing price. We calibrated the pumps in the filling stations. It was to start between Sunday and Monday June 9, 1993.We were summoned to Abuja i.e. the head of the Transition Council, Chief Ernest Shonekan and myself at the instance of General Abacha who thought what I was doing was not approved by government, even when I went there with all the council memos and other documents. Ironically we were told to stop it. The reason was that if we start removing subsidy, it might affect the June 12, presidential election.And for that reason, we lost hundreds of billions of dollars, we distorted the economy, we made many people to become corrupt. We degraded our infrastructure because of the money lost. We had initiated in the ministry of petroleum resources under me, product pipelines constructions and it was my hope that by the middle of the 90s every depot – we had 27 depots in the country – will be connected to the pipelines and that tankers will be restricted to 100km radius. You have been abroad. Have you seen a tanker going from London to Birmingham? So, it is not just removing subsidies, there are things the president will do.